Delivering change. CitySprint (UK) Group Ltd Annual Report and Accounts 2015

Transcription

1 Delivering change

2 Our vision To be the same day delivery partner of choice through the development of global, leading-edge technology platforms to innovate and further support our customers distribution needs, across all our current and new markets. Our brands Our brands allow us to capture unique opportunities that exist within the logistics market. Who are we? CitySprint is the UK s largest same day distribution company, providing flexible, reliable, cost-effective and technology driven courier and logistics services. How do we do it? We understand the important role technology plays in improving customer experience and continue to invest in leading-edge technology platforms that enable us to offer creative and innovative delivery services for our own business and our commercial partners. Why do we do it? The changing digital landscape is creating an increasing demand for delivery convenience and choice, particularly in key growth sectors such as retail and healthcare. We have been quick to recognise the shift in delivery expectations by developing cutting-edge technology that addresses consumer need. Same day delivery group with specialisms in healthcare; retail; scheduled logistics; baggage repatriation and digital print, mailing and distribution Revolutionising last mile delivery technology Providing 1-hour delivery timeslots for retailers and consumers

3 1 Contents Overview CitySprint at a glance 02 Year in review 04 Chairman s statement 06 Strategic report CEO s review 07 Market overview 12 Business model 1 4 Strategy 15 Innovation and technology 16 Customers 18 People 20 Key business activities > Healthcare 22 > Retail 24 > Scheduled Logistics and Other 26 ESG strategy 28 Governance Board of Directors 30 Executive Team 32 Officers and professional advisers 34 Directors report 35 Directors responsibilities statement 37 Financial statements Independent auditor s report 38 Consolidated statement of comprehensive income 39 Consolidated balance sheet 40 Company balance sheet 41 Consolidated statement of changes in equity 42 Company statement of changes in equity 42 Consolidated cash flow statement 43 Notes to the consolidated cash flow statement 44 Notes to the financial statements 45 For more information within this Annual Report This Annual Report is also available on our website citysprint.co.uk/ financialinformation

4 2 CitySprint at a glance We have established ourselves as a market leader in the UK for time critical same day delivery. Our services Our services are primarily at the niche end of the distribution sector supporting critical delivery products across a range of vertical sectors. SameDay Courier: ad hoc point-to-point delivery. SameDay Logistics: regular scheduled collections including time specific delivery slots for clients across retail, healthcare, public sector and distribution. NextDay & International: timed UK overnight deliveries and express overseas shipments. Revenue by service 66.3m SameDay Courier +15.1% (: 57.6m) 66.1m SameDay Logistics +14.2% (: 57.9m) 13.6m NextDay & International +7.9% (: 12.6m) 10% 45% 45% SameDay Courier SameDay Logistics NextDay & International Our specialist market sectors We are established in markets such as traditional courier services and pharmaceutical wholesale, whilst also being strongly positioned in high growth sectors such as healthcare, retail and engineering parts. Revenue by sector 90.8m Scheduled Logistics and Other +9.9% (: 82.6m) 35.7m Healthcare +19.8% (: 29.8m) 19.5m Retail +23.4% (: 15.8m) 13% 25% 62% Scheduled Logistics and Other Healthcare Retail Where we operate Operating from 41 wholly owned service centres across the UK providing national coverage with the support of local knowledge. Revenue by geography 111.3m Regional +13.1% (: 98.4m) 34.7m London +16.4% (: 29.8m) 24% 76% Regional London

5 3 How do we create value? Our scale, self-employed model and sector-leading technology make us unique in the same day market. A combination of our flexible and asset light courier model; national network of local service centres; unrivalled range of services; and superior technology platform enables us to consistently create value for our customers. More on our business model from page 14 What makes us different? Largest same day courier fleet in the UK; London s largest pushbike fleet Broad national coverage with the ability to reach 88% of the UK population in just 60 minutes 06 Business built on leading technology and infrastructure enabling control of the end-toend customer experience 07 Market-leading position in established markets such as traditional courier services and pharmaceutical wholesale 03 Network of 41 service centres each functioning as a local operation increasing flexibility and the ability to react dynamically to clients' needs 08 Strongly positioned in growth sectors such as retail, healthcare and engineering parts 04 Unrivalled range of tailored same day services 09 Flexible operating model ideally positioned to support the continuing shift to omni-channel 05 Access to over 3,000 DBS-checked professional couriers 10 Proven and experienced management team driving strategy and execution What are our strategic priorities? We have a clear growth strategy that builds on the success of the last five years. More on our strategic priorities from page 15 Investment in technology to drive market-leading solutions particularly in pathology, community healthcare, online retail and specialist logistics Focus on growth in key market sectors such as healthcare and retail Buy and build in the same day market to expand geographic reach and service offering

6 4 Year in review A year of successes. Year in numbers 10m+ >99% 88% Over 10 million critical deliveries made Success rate of >99% of items delivered first time Able to reach 88% of the UK population within 60 minutes 4 CitySprint expands with four acquisitions partner retailers signed with On the dot 10,000 Achieved 10,000 downloads of MyCourier app Key achievements CitySprint achieved a number of key milestones in, establishing LastMileLink Technologies and launching On the dot. LastMileLink Technologies, the s technology accelerator, is established Launch of On the dot providing 1-hour delivery timeslots for retailers and consumers Gerard Keenan named Private Equity-Backed FD of the Year CitySprint wins nine awards, at the Institute of Couriers, National Courier Awards London Contact Centre honoured with a series of wins at the prestigious Customer Voice Awards Roll-out of the National Telephone Switch providing the business with a more efficient call management system

7 5 Performance highlights Another positive year has resulted in double-digit growth that demonstrates the strong cash generation from the and supports the continued investment back into the business. Revenue vs. EBITDA performance 146.0m Revenue +14.1% (: 128.2m) m 32.8% Revenue (m) EBITDA (m) Gross margin +16.3% (: 41.2m) Gross margin +0.6% (: 32.2%) m 101.1m 112.7m 128.2m 146.0m m -1.9m Underlying EBITDA* +24.4% (: 13.5m) Loss % (: -1.3m) Revenue Revenue EBITDA * EBITDA is defined as the operating profit before interest, taxation, depreciation, amortisation and non-recurring items. What was the market backdrop? CitySprint is uniquely positioned to take advantage of rapid volume growth in the UK same day market driven by the longterm trends in: More on our market from page 12 Immediacy and convenience Growth in sectors offering same day services Outsourcing of in-house fleets by both the public and private sector Increase in GDP underlying growth in business activity 78% 78% of consumers want same day shipping efficiency is key to an exceptional customer service. State of Shipping in Commerce 2016, Temando

8 6 Chairman s statement Another year of positive growth supported by a successful strategy and committed team. Creating double-digit growth; fostering innovative technology; expanding into new markets; consolidating and growing a position as industry leader. Most businesses would be proud to point to just one or two of these achievements as an annual success story. CitySprint, through the vision and determination of everyone in the Company, can look back at and in fact the last five years as a time in which it accomplished all of them. CitySprint s leadership has grown EBITDA from 7.5 million in 2010 to 16.8 million in ; an increase of 124%, fuelled by a mix of organic growth and smart acquisitions that enhance the service offering. It is a strategy that the business is committed to sustaining over the next decade. So many organisations claim to be forward thinking, but CitySprint has actively invested in technology that will allow it to meet the current and future needs of its customers. In fact, capital expenditure has tripled to maintain CitySprint s position as an innovator both in the delivery sector and in specialist segments that have high technical barriers to entry. The same day sector is becoming increasingly crowded and competitive but CitySprint is ideally placed to capitalise on its growth. To do this, the business will build on its investment in technological innovation, introducing new and exciting services to the industry and sustaining the first class service it already offers. Above all, it will stay true to its customer-centric ethos, which is set by the management team and extends throughout our 41 service centres to our valued network of over 3,000 couriers. Finally, I would like to thank everyone who has worked so hard to make CitySprint the leader in the same day market and for their continued enthusiasm and drive which has played such a critical part in the Company s financial and operational success. David Burtenshaw Chairman 27 April 2016 CitySprint s leadership has grown EBITDA from 7.5 million in 2010 to 16.8 million in ; an increase of 124%. One of the management team s greatest successes has been their capacity to play to both established and high growth sectors. In the healthcare and retail markets in particular, customers have faced new challenges driven by step changes in the industry landscape such as rapid growth, shifting legislation, and the increasing demand for faster and more convenient deliveries. By anticipating and responding to these factors CitySprint has enabled its customers and itself to grow, and all the while continuing to lead the expanding same day market. I will leave discussion of s specific achievements to Patrick, but would like to take a moment to look to the future.

9 7 Chief Executive Officer s review Continuing to build on our position as market leader. saw the deliver another excellent performance as we continued to attract clients to our enhanced services and extended sector and geographic footprint. This trend delivered growth of 14.1% in (: 13.3%), revenues to million (: million) and a strong underlying EBITDA of 16.8 million (: 13.5 million). This performance is further testament to our strategy of building deeper, more valuable relationships with the clients we serve, and anticipating the needs of the sectors that we believe we can transform. This has been at the heart of our business for six years and it will continue to guide us in the future. But of course our strategy would have remained just that without the diligent efforts of our people who strive every day to make a difference to our clients businesses and I m fortunate to have such a passionate and committed team around me. It has been inspiring to witness so much innovation in but as I describe later, we have a good deal more to be excited about in Before we look forward, let me summarise our overall financial and operating performance in : CitySprint operates with excellent financial resources and it is well positioned to continue to execute its strategy to grow the business both organically and through selected acquisitions. Revenue vs. gross profit m Revenue (m) m 38.0m 13.5m 41.2m 47.9m m 128.2m 146.0m 2013 Gross profit EBITDA Revenue

10 8 Chief Executive Officer s review (continued) Financial summary of and key performance indicators The identifies revenue and EBITDA growth as its key performance indicators Record revenues for the year increased 14.1% to million (: million) EBITDA, the key measure of the business increased by 24.4% to 16.8 million (: 13.5 million) Increased revenues were a result of both organic growth and acquisitions Continued organic growth across all business operations in key divisions operated by CitySprint Healthcare, CitySprint Retail and CitySprint Logistics Ongoing investment in innovative technologies, expanding the s suite of products available to customers. This included development of CitySprint s On the dot delivery service that allows shoppers to specify their chosen 1-hour delivery window, seven days a week and was launched in to retailers with an open API to facilitate integration with e-commerce and EPOS systems Continued acquisitions programme complementing the s organic growth: Four businesses successfully integrated into the during the year in line with our strategy to leverage CitySprint s business infrastructure Key performance indicators The key performance indicators of the are its revenue and EBITDA, which are described in the review of the financial summary to the left. Results Turnover for the year was 14.1% higher at million (: million) and EBITDA for the year was 24.4% higher at 16.8 million (: 13.5 million). Loss for the financial year was 1.9 million (: 1.3 million). These are excellent results and once again demonstrate the strong cash generation from the, which supports the continued investment back into the business, in terms of our people and our technology. The business maintains excellent relationships with its banking partners and at the year end reported positively on all of its covenant tests under its most up-to-date lending agreements with RBS and Clydesdale Bank, who have most recently been joined by HSBC. Our customers and market dynamics The CitySprint network provides support to a diverse range of sectors including healthcare, retail and scheduled logistics, which have a growing demand to utilise CitySprint as their outsourced distribution provider for their same day deliveries. We discuss these sectors in more detail later in this report. CitySprint is in a strong position to capitalise on the growth in a UK market not only across these existing customer segments but also across a number of emerging sectors. Here, we are looking to build on a nascent market share, in areas such as the growing pharmacy to consumer segment, and of course same day retail and food and beverage markets. Operations CitySprint achieved very strong organic growth, with increased levels of activity in each of the Company s core operations of Healthcare, Retail and Scheduled Logistics. In overall terms, there has been a good level of revenue growth across the s main regional areas and we have continued to build the regional network through selected acquisitions. It has been really encouraging that very good levels of like-for-like growth have been achieved over the last year and this is a great credit to the respective management teams in each of our 41 service centres across the UK, the operational staff and our outstanding courier base; a true force of over 3,000 people, offering a flexible delivery network that responds to time critical same day delivery requests 24 hours a day, seven days a week. CitySprint is well placed as the UK market leader at the premium end of the growing UK market for outsourced, time critical and final mile delivery logistics. We have created significant economies of scale across the business, which now operates through a national footprint of service centres, supporting a network of CitySprint couriers. Our network s footprint supports a delivery reach that positions CitySprint as the largest same day player in the UK market and, when placed alongside our leading-edge technology, our service capability allows us to reach 88% of the UK population within 60 minutes. We have been very successful during in growing our customer base as increasingly businesses appreciate that CitySprint can deliver a compelling and sustainable resource that can support their business strategy, whether they are a single trader, multi-site SME or larger pan UK or international business.

11 9 CitySprint Healthcare experience and innovation to meet healthcare logistics challenges We understand the ever-changing demands on our modern healthcare service and the need to provide quality patient care cost effectively. We have a wealth of logistics and distribution experience, developed over the last 25 years, servicing the hospital and pharmaceutical sectors. We provide a range of services through CitySprint Healthcare where we have continued to develop very strong revenue growth. These include pathology and specimen transportation, hospital logistics, home delivery of medications, and clinical trial and pharmaceutical logistics. The healthcare sector is a key focus for the management team and we continue to build the range of services in this area, supported by continued significant investment in technology and training. CitySprint Retail delivery technologies that meet the consumer s convenience factor Today s consumer expects convenient deliveries designed to fit around their busy lifestyles. CitySprint Retail provides a range of services designed to meet the demands and challenges of the 21st century retail environment, from store replenishment to final mile logistics solutions, including time-specific home deliveries. We have developed a suite of flexible services that are designed to assist retailers deliver on the promise they make to their customers. We have been pleased with the growth in our retail operations and also remain cognisant that this is a sector which demands high levels of service. It has always been our strategy to become a market leader in this area and we continue to invest significantly in developing our technology platform, most recently through On the dot TM, and fully expect to see further innovations emerge from our technology incubator to support retailers and provide the best of breed services to the consumer. CitySprint Scheduled Logistics expertise to deliver on complex same day challenges As we increasingly become the logistics partner of choice to many more businesses across the UK that require same day services, we deliver a full suite of solutions, which are carefully designed to meet the particular needs of different industries. Our commercial aim is to partner with our clients to turn their respective challenges into a real competitive advantage for their business by creating a supply chain for them that is both transparent and efficient and provides a fulfilment process, which is ably supported by leading-edge technology. These benefits can be clearly defined in the service to their clients. Acquisitions The management team completed four acquisitions during the year, each notable in its own right. In April, we acquired Crisis Couriers adding a new service centre in Northampton to our UK network. In July, we acquired CJ Logistics and World Wide Logistics and both joined our Milton Keynes Service Centre. And finally, in November, we acquired Bexley Couriers adding a new Dartford service centre to our network. In addition, we also acquired the IP of our operations system from our Australian IT supplier in March. We have been very pleased with the way in which each new team coming into the business has embraced the process. The respective employees and management teams have risen to the challenge of change, and brought further incremental benefits to the overall business as a result, especially once each acquisition is completely integrated into our technology and network infrastructure. Innovation and technology: revolutionising last mile delivery technology The logistics industry has experienced enormous change in recent years with technology advancement at the centre of improving the customer experience. As a business that has always prided itself on providing market-leading systems, we have always acknowledged the key role that technology can play in a successful business. Equally, we are cognisant of the need to ensure we are continuously delivering innovation throughout the both in terms of the technology we employ and the processes that we deliver. We believe that this is really important for the same day distribution sector as a whole and the future of CitySprint. Bringing flair, one of our four values, into every part of the operation is part and parcel of delivering on the future we want for the business, ensuring innovation, passion, imagination and creativity are firmly embedded into our working ethos. With technology evolving at a rapid pace and affecting everything we do in our everyday lives, flair has never been more critical and I am very pleased to say that it is something in no short supply within the. It is also demonstrated by the creation of a technology innovation capability within the which has a specific purpose to create and develop systems that focus on improving our business model.

12 10 Chief Executive Officer s review (continued) Empathy Accountability The success of the CitySprint business will continue to be driven by the important combination of the entrepreneurial spirit of our people who are enabled by the continued investment we make in innovative technology, allowing them to deliver excellent service to customers. Reliability Our Promise Because every delivery matters In November, we established a new business unit called LastMileLink Technologies, an independent business environment to promote an agile culture of creativity and to develop new leadingedge applications and platforms which can support the challenges of the future; the challenges of our clients to deliver improved customer experiences for their customers. The management team of this new unit has already been spearheading technology developments such as our e-commerce market-leading 1-hour delivery window product, On the dot TM. The new team is led by Santosh Sahu, who brings with him a wealth of proven experience having worked with Asda, Tesco and John Lewis logistics teams to develop multi-million pound supply chain strategies across South Asia, Europe and the USA. Our people: delivering the CitySprint promise Whether we are talking to customers with multi-site operations across the UK or small local businesses, the cornerstone of the CitySprint ethos is delivered by the people within our business, from Aberdeen to Plymouth and from Cardiff to Norwich, there are people that know the requirements of the local businesses around them and can also offer a broader perspective across our UK network and into our international service. Our customers benefit from local expertise and a national capability, which works across a very robust and intelligent technology base. Flair Strategic objectives CitySprint is managed in a prudent and sustainable manner, minimising financial risk whilst providing a significant level of funding for investment back into the business. CitySprint operates with excellent financial resources and it is well positioned to continue to execute its strategy to grow the business both organically and through selected acquisitions. CitySprint is also well positioned to develop further its customer base in key market segments, which include: Healthcare, Retail and Scheduled Logistics, whilst notwithstanding other potential opportunities within developing high growth logistics sectors and new territories. It is the management team s intention to develop new customer segments both organically and through further acquisitions where it is appropriate to do so and, where the target acquisitions meet CitySprint s strict investment criteria. It is always our aim to provide a positive working environment and culture for our employees and our commercial ethos is always to look for improvements in what we do, whether by technical innovation, new training methods or improvements in how we communicate across the CitySprint. We continue to look for working practices that benefit our employees, customers and couriers. The success of CitySprint will continue to be driven by the entrepreneurial spirit of our people We encourage promotion and development from within CitySprint and are delighted with the high level of retention rates amongst our key people. The positive and empowering culture within CitySprint also shows through to the clear focus we have on the customer experience. It has been a key factor when we have acquired and integrated businesses the process of successfully integrating staff and maintaining focus on a new customer base this is the ultimate measure of that success. Management have determined that the principal risks and uncertainties facing the are the financial risks found in the Directors' report. Principal risks and uncertainties The principal risks and uncertainties facing the are described below. Competitive risks The operates in a very competitive market and some of the contracts it has are subject to periodic competitive tender. The has an experienced bid team, which has a high success rate and the is able to continue to offer competitive pricing through its investment in technology.

13 11 Derivatives The exposure of the to interest rate movements is managed by the use of swap and cap agreements (see note 16 for details of the contracts in place). These swap and cap agreements are designed to ensure that interest costs are fixed and that associated costs can be controlled for cash flow purposes. Once put in place, it is expected that such instruments will be held until maturity. None of the derivatives are held speculatively. Exposure to credit and liquidity risk Cash flow risks The s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest rates. The uses foreign exchange forward contracts and interest rate swaps contracts to hedge these exposures. Interest bearing assets and liabilities are held at a fixed rate to ensure certainty of cash flows. Credit risk Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. policies are aimed at minimising such losses and the runs an effective credit control operation and limits individual trade debtors to appropriate credit levels based on their financial strength. The has no significant concentration of credit risk, with exposure spread over a large number of counterparties and customers. Liquidity risk Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities. The aims to mitigate liquidity risk by managing cash generation through its operations, applying cash collection targets throughout the. The also manages liquidity risk via the receivables financing facility, fixed term loan and shareholder loan arrangements in place. Supplier payment policy The s policy is to settle terms of payment with suppliers when agreeing the terms of each transaction, ensuring that suppliers are made aware of these terms and abide by them. Trade creditors of the at 31 December were equivalent to 24 (: 38) days purchases, based on the average daily amount invoiced by suppliers during the year. Current trading and future outlook We had planned and anticipated strong growth during. The current year is also benefiting from the momentum in organic growth that the is enjoying, both as a result of the ongoing investment programme across the CitySprint network, but centrally, as we continue to invest in new technology and our people the two foundations of our business. In addition, I am also delighted to confirm the post balance sheet date event, which is notable in its own right the successful completion of a major round of new investment to support CitySprint s next stage of growth. LDC, the mid-market private equity firm, has bought a stake in CitySprint, whilst Dunedin, our cornerstone investor of over five years, has retained an equity stake in the business alongside the management team which has also retained a significant equity holding. The new capital entirely supports the next stage in the s strategy; building on CitySprint s position in high growth, last mile retail and healthcare sectors. The investment also enables the to accelerate the development of innovative final mile delivery solutions in our LastMileLink Technologies division, while supporting the ongoing roll-out of CitySprint s On the dot TM retail and consumer brand a delivery service allowing shoppers to choose a 1-hour delivery window, launched in. The investment cements CitySprint s first mover advantage in the same day market where it is the market leader. The Company is also strongly positioned in several specialist markets where there are high barriers to entry. The s focus on new technology solutions is aimed at capitalising on the growing 1.7 billion same day market opportunity in the UK. In addition, we can report on the successful launch of our newly created LastMileLink Technologies division, as discussed in the Innovation and technology section. LastMileLink Technologies is the s technology accelerator, supporting new product development and improving the delivery platform infrastructure, in line with the s growth strategy. We can look forward to the current year and beyond with great optimism in the knowledge that CitySprint is on a clear pathway to achieve further significant growth as the leading provider in the UK same day logistics market. I am delighted to say that we continue to build excellent relationships across a growing number of sectors in the UK. Indeed, we were pleased to once again produce our annual survey, polling business sentiment among the SME sector, gauging business optimism for the third year now, through our Collaborate UK report. Our thanks go to all of the stakeholders in the whole, as we welcome LDC as our new shareholder. We also thank our advisers and suppliers and our enlarged banking syndicate of RBS, Clydesdale and most recently, HSBC. Last but not least to our customers, employees and couriers. I look forward to an exciting year ahead in Patrick Gallagher Chief Executive Officer 27 April 2016

14 Retail will change in many ways, but immediacy will have the biggest impact our homes will replenish themselves; our packages will arrive hours after the order. It s only a matter of time before retailers evolve their business models to fully embrace this notion of immediacy. David Dorf Oracle Retail August

15 13 Market overview The UK s same day market is currently estimated to be worth 1.7 billion across both the outsourced and insourced addressable markets. With the continued trend to outsource same day delivery services, in both the public and private sectors, overall spend is set to increase. This is particularly apparent in the higher value specialist service areas with greater operational complexities and a requirement for a bespoke chain of custody. Historically, the established outsourced market has grown by circa 4% per annum between 2010 and and more recently has accelerated as new segments, employing the outsourcing of same day logistics, grow more rapidly Efficiency innovations: Mobile workforce receiving parts and stock just-in-time and retailers optimising stock cost/availability across stores both enabled by same day delivery Digitisation: Transformational digital technology including the 'Internet of Things' is dramatically shifting consumer behaviour and business need to innovate ahead of competition The evolution of technology over the past 10 to 15 years has shaped how consumers behave and interact with brands. This has led to an ongoing shift in consumer expectations for immediate services throughout their online and in-store experience. Whilst a relatively low level of retailers have historically utilised the same day model, an increasing number are starting to offer same day delivery services as part of a suite of delivery options. More importantly leading retailers are using delivery as a key differentiator. CitySprint is very well positioned to benefit from the most rapidly growing segments, including retail and healthcare markets where demand for both immediacy, convenience and custody chain tracking technology is increasing at pace. Anticipated growth in the outsourced same day market is underpinned by a number of drivers Demand for immediacy and convenience: The long-term-megatrend in immediacy, is driving a structural shift in customer expectations and increasing demand for faster and more convenient deliveries Service offering growth: Growth in new and existing businesses seeking to differentiate through same day services and choosing to fulfil them through an outsourced specialist Increased outsourcing: Cost reduction objectives in both public and private sectors resulting in a switch to more costeffective solutions for same day delivery Increased business activity: GDP performance resulting in underlying growth of business activity Healthcare: Healthcare is benefiting from specific tailwinds (ageing population, shift towards local community care and a desire to improve diagnoses with more samples) Virtuous circle in the same day delivery market Market volumes grow through volume tailwinds Ability to offer lower prices and improved service strengthen the same day proposition and activate additional volume across a number of vertical sectors A positive reinforcement effect exists in the same day market Increased volume reduces cost to serve through economies of scale As costs decrease, same day operators are able to lower prices without compromising margin

16 14 Business model Providing flexible and innovative customer-focused services. Our unique business model leverages our key strengths to maintain our position as the UK s leading same day delivery partner. The business is delivered through an end-to-end process that is supported by market-leading technology and an experienced network of people, underpinning the development of more flexible and innovative customerfocused services. This helps us to create real value for our clients who benefit from competitive pricing and an excellent service quality. Specialist coverage Broad sector coverage with a focus on high growth areas such as retail, healthcare and specialist logistics Market-leading technology Established brand A well recognised and established brand supported by over 13 years of experience Supported by: Asset light approach A flexible, asset light approach enabling control of the end-to-end customer experience, whilst leveraging scale and efficiency benefits An experienced network Market-leading technology platforms and applications offering specialised solutions that address clients needs Dedication and commitment of a national network of over 700 customer-focused employees providing local knowledge and the delivery of a range of unrivalled same day services High quality service offering A high quality, flexible and cost efficient value added service offering to all our customers Re-investment Continued re-investment in growth and innovation

17 15 Strategy A proven strategy for growth. saw the continuation of a successful strategy, delivered over the last five years, that is focused on: Buy and build in the same day market to expand geographic reach and service offering High growth in key sectors such as retail and healthcare Investment in technology to drive market-leading solutions, particularly in pathology, community healthcare, online retail and specialist logistics Organically growing our core business through service, value and innovation 60m Turnover 2010 Buy and build focus in SameDay Courier and development of the sector offering in Retail and Healthcare Our strategy continues to be underpinned by a high level of service; carefully selected partnerships; a strong focus on our customers' needs and a robust financial discipline. Buy and build Adding scale in existing regions, expanding into new areas and offering capability and capacity in specialised delivery types. Sector focus Our leading market position in key vertical sectors places us in a strong position to capitalise on our own growth in both developing segments such as pathology and retail B2B, and nascent market segments, such as retail B2C, pharma B2C, and food and beverage. 146m Turnover Investment in technology platforms to benefit from opportunities in pathology; community healthcare; online retail and specialist logistics combined with selective acquisitions in SameDay Courier Investment in technology A strong technology capability and continued investment in innovative next generation delivery platforms that improve the customer experience. Organic growth Providing customers with a flexible, reliable and cost-effective service in the traditional courier and distribution markets. 271m Turnover 2020 Opportunity to build a 270m+ group focused on mission critical, value added SameDay Courier and Logistics in high growth vertical sectors Retail Public and private sector Healthcare Professional services SameDay Courier SameDay Logistics Acquisitions Healthcare Retail

18 16 Innovation and technology An exciting year of new development built on a history of innovation. Our technology capability is core to our service differentiation. Combined with our service quality and fleet, it ensures efficient job allocation, accurate order tracking, bespoke services to specific sectors and most importantly product innovation. We have invested significantly in our technology to support our leadership position, which will continue to be an important part of our growth strategy. has been an exciting and productive year with the development of a number of key technology products, the launch of our On the dot service and the establishment of our technology innovation accelerator, LastMileLink Technologies. Smarter allocation initiative As part of this strategy, we are investing in the update of our internal IT platform, developing a unique algorithm that will automatically recommend the most appropriate courier for a particular delivery. The algorithm will work based on set criteria such as vehicle type or delivery times and will anticipate both current and future demand, positioning our courier resource more efficiently. This service efficiency leads to improvements in the operation of our fleet and reduces mileage travelled and empty miles. Managed Service Portal In we launched a new Managed Service Portal, providing clients with a web-based platform that offers users a choice of delivery suppliers in addition to our own. The portal selects the delivery providers best suited to a particular job for same day, next day and international services. This offering helps support our customers need for flexibility and service management allowing them to streamline and save on their own multi-supplier administration and operational costs. LastMileLink Technologies In November we created a new division LastMileLink Technologies the s technology accelerator, supporting the development of innovative new products for CitySprint and improving the delivery platform infrastructure and service we offer our customers. Created to disrupt the logistics and delivery space, LastMileLink Technologies will not only improve processes but will help overcome traditional last mile delivery challenges. The new business unit has spearheaded technology developments such as our e-commerce product, On the dot and our smarter allocation initiative.

19 17 On the dot On the dot, an innovative retail and consumer delivery service, was launched in. The market-leading technology platform allows us to manage delivery capacity in a dynamic way, making 1-hour delivery timeslots visible to both retailers and shoppers based on factors such as customer and store locations. API integration Customer 1-hour delivery timeslot OR immediate delivery status notifications Live GPS tracking On the dot driver Retailers can integrate the technology directly into their checkouts and EPOS via our RESTful API (application programme interface), both online and in-store. Once installed, retailers are able to receive and display dynamic timeslot availability and pricing, as well as live track deliveries from store to door using our GPS technology. Our Retailer Portal is designed to make the booking process quick and easy for smaller retailers who choose not to integrate. The Portal enables stores to offer the service immediately via pay as you go on demand bookings or by purchasing delivery bundles. Retailer E-commerce website In-store EPOS system Retailer systems send: Order details Requested delivery slot RESTful API On the dot system sends: Service availability Delivery slot availability Delivery confirmation Live tracking information On the dot Operational system CitySprint technology timeline On the dot s specified 1-hour delivery technology, is available to retailers of all sizes across the UK, covering deliveries to 99% of the UK population More on our On the dot service from page CitySprint brand is created to become the UK s largest same day delivery company 2005 Launch of real-time GPS tracking for each delivery an industry first 2008 Market-leading pathology sample tracking technology created 2008 Launch of CityBridge, a booking interface that allows customers to connect directly to CitySprint 2013 Release of the MyCourier app for instant quotes and booking 2013 Formation of the CitySprint Logistics Platform to enable route planning and automatic job allocation Creation of a centralised multi-supplier management platform Independent Carrier Management System Launch of On the dot, offering dynamic timeslot availability to retailers and consumers LastMileLink Technologies, CitySprint s technology incubator, established

20 18 Customers Ensuring we put our customers first and continue to provide a high quality service. Understanding our customers priorities, issues and strategies is essential if we are to design delivery and logistics services to support their key objectives and business goals. We must have an in-depth understanding of our customers, of their aspirations and concerns, and the factors that affect their choice of delivery partner. We must also know where we need to improve and be ready to take on board the valuable feedback that our customers provide. Service innovation Providing a high quality service, including consistent levels of first time delivery is important. To do this we must ensure we invest in the right technology to deliver real benefit to our customer s businesses. To remain the leader in the same day delivery market, the business must be supported by best in class technology and service orientated employees. We are constantly adapting our products and services to meet our customers needs favouring those that will ultimately save them time and make their lives easier, with specified timeslots and even instant deliveries. Customer experience We are always looking to improve the customer experience and continue to invest and innovate, ensuring high standards are maintained. We recognise the importance of developing personalised and tailored relationships and place great emphasis on our account management team to deliver a high quality service at all times. As part of our commitment to continuing to improve the customer experience, we have recently appointed a Head of Customer Experience and a number of Customer Care Champions whose primary role is to promote CitySprint s core values and best practice principles. We offer our Customer Care Champions a bespoke training programme that provides them with the knowledge, skills and confidence to cascade these practices throughout the business, ensuring our customers are always at the forefront of what we do. We also regularly conduct client surveys to measure customer satisfaction. Connecting with our customers It is crucial that we are in touch with our customers and that we provide a variety of ways in which our clients can contact us. Customers are offered a full suite of job submission platforms allowing them to book a service over the phone, online (via our MyCourier app; citysprint.co.uk or onthedot.com), or for our larger clients, via one of our integrated systems enabling efficient order and internal cost allocation. This year we have also successfully completed the roll-out of the National Telephone Switch to all of our 41 service centres across the UK, providing an improved call service to our clients. Social media is an increasingly important method of communication and we are always looking at ways to extend the number of platforms we offer. Currently customers are able to connect with us via Twitter, LinkedIn, our LiveChat function and the Contact us page on our website. We also have plans to extend our social media offering via Facebook and Instagram. Booking volume by channel 16% 11% 25% 48% Customer service awards In we were honoured to receive several awards for customer service recognising both personnel and couriers. Our London Contact Centre won the team award for Best Small Contact Centre in the logistics field at the Customer Voice Awards an award that is judged purely on the basis of customer feedback and was ranked in the top ten of the easiest to do business with in the UK. In an independent survey conducted on behalf of the Customer Voice Awards we were pleased to receive consistently high scores, with particular recognition given for our first call resolution and agent performance. 99.2% First call resolution 92.0% Agent performance Manual booking (e.g. phone) Scheduled Online and app Client interface

21 12,500+ Supporting a highly diverse customer base of over 12,500 clients >99% Success rate of >99% of items delivered first time 98% 98% of SLA (service level agreement) targets achieved

22 20 People Our business is built on innovation, which is captured in the entrepreneurial spirit of our people. Our people are key to our success, bringing our values to life and putting our strategy into action. We are a dynamic company built on innovation, which relies on individuals with passion and creativity to help us adapt to the changing needs of our clients. We value the talents, skills and capabilities of our people and are committed to providing an inclusive workplace with excellent opportunities for career progression, enabling every employee to realise their potential. Recruiting and retaining talented people We understand the importance of attracting, developing and retaining talent if we are to create a culture that reflects the core values that underpin everything we do: reliability, accountability, empathy and flair. Similarly, it is important that we recruit the right people that will help deliver our vision of being the same day delivery partner of choice and to ensure we have the capabilities and leaders in place to deliver our strategy. During, we created over 30 new roles and supported over 3,000 self-employed couriers. This increase, partly due to the four acquisitions that took place throughout the year as we welcomed existing staff and couriers to the CitySprint family, was also due to the creation of our new delivery technology company, LastMileLink Technologies. Investing in our people Our goal is always to hire, engage and retain the best people and provide them with the skills and training to help them develop their careers and deliver the highest level of service to our customers. Training and development We recognise that development drives both job satisfaction and company performance and offer a diverse range of training and development programmes across the business. Our specialist leadership programmes for senior management focus on strategy realisation and implementation, whilst all of our managers are provided with disciplinary and performance management training to ensure we are consistent in our approach across the Company. A bespoke training programme for our Customer Care Champions provides them with the knowledge, skills and confidence to promote best practice and our core values throughout the business, ensuring our customers are always at the forefront. We also offer the opportunity for all of our employees to complete the nationally recognised NVQ qualification in a variety of different areas including business administration, warehousing, team leadership, IT, management and sales. Through our apprenticeship programme we attract a valuable source of young but talented individuals employed on a full-time basis in key areas of the business such as HR, IT and marketing. We are proud to have been involved in the Advanced Apprenticeship Scheme in Business Administration, since 2013 providing valuable workplace experience to over 15 young people. As well as training, we are currently working on rolling out an annual appraisal programme to ensure that every manager can play a key role in assisting their staff with their personal development. I ve worked for CitySprint for six years, starting as a courier. I love the busy environment and most of all that no day is the same. It s a pleasure to work for a national company at the very top of their industry, who recognise good performance. Steve Whiteside Operations Manager Bristol Benefits We offer a range of staff benefits, utilising the salary sacrifice scheme to ensure our employees get the best value for their money. As well as a pension fund, we offer childcare vouchers and the Ride2Work cycle purchase scheme. Employees are also entitled to Medicash, allowing them to claim back money for medical expenses and season ticket loans. For our senior management we also offer private healthcare.

23 Over 700 employees work to achieve our strategic goals 3,000+ Access to over 3,000 professional couriers across our UK network personnel completed a training course in 43 Over the course of the year, 43 employees participated in the NVQ programme 15 Since 2013, CitySprint has supported 15 apprentices through the Advanced Apprenticeship Scheme Couriers Our self-employed, professional courier fleet of over 3,000 is the largest in the UK, nearly doubling in the past five years. We pride ourselves on offering excellent conditions for our couriers with flexible working hours, high earning potential, ongoing training and support that ranges from preferential rates for van hire and insurance to providing fuel cards. Our online portal, ifleet, contains all our courier information including licences, training and vehicle maintenance and ensures we are able to provide the correct level of support needed to each courier whilst working with us. 60% Over 60% of our self-employed couriers have worked with us for more than two years Each year, we award hard working individuals who excel in their work and effort to support the business with the Courier of the Year Award, which we have celebrated for over 10 years. In, nine of our couriers were recognised outside of the business at the Institute of Couriers, National Courier Awards, which honours the best in the industry. We saw success in several categories, with management and customer service staff joining six couriers on the podium, more than any other company involved. CitySprint cycle courier I ve been a courier for over three years and have spent most of my career working as a self-employed cycle courier for CitySprint. Whilst I love working on my own through the day, I also love the social side of the job, which is completely unique to the world of cycle couriers. It is an unwritten rule that you nod your head at, or say hello to, every other cycle courier you pass in the street. Eventually you ll be picking up, or dropping off, at the same place at the same time and that s how everyone gets to know everyone else. Of course there are some negatives to the job as you would expect. Dealing with London traffic, irate drivers and the English weather isn t always fun! There aren t many people who get to turn their passion into a living, so I do feel very lucky to get to do what I love every day, as well as working with a company that makes me feel valued and supported. Georgina Evans Cycle courier London

24 22 CitySprint Healthcare A leading private logistics partner for the UK healthcare industry. CitySprint Healthcare is at the forefront of the evolution of the healthcare sector and has seen another successful year of growth with revenue reaching close to 40 million, representing almost a third of our business. During the past couple of years the sector has changed at an unprecedented rate and scale, as the healthcare system is stretched to new levels with the increasing strain of an ageing population (expected to be close to 20 million aged 65 or over by 2050). There has also been a noticeable shift to localised community care, leading to a greater role for logistics providers. Pharmacy and medication delivery In response to the movement of healthcare provision into local communities, we provide couriers to support high street pharmacies deliver medicines to patients at home and in care homes. We have made significant investment in further up-skilling our team by increasing the number of specialist pharmacy trained couriers with over 2,000, operating within MHRA guidelines, across the network. These couriers work to support high street pharmacies and local communities, providing patients with greater access to their medicines. Pharmaceutical wholesale CitySprint Healthcare also has a dedicated team of experts focused on delivery solutions for the pharmaceutical wholesale market, including over the counter (OTC) products, finished products, sensitive clinical trial research materials and investigational drugs. Hospital and emergency care CitySprint Healthcare work closely with NHS foundation trusts: acute trusts, teaching hospitals and private hospitals in the provision of final mile delivery of consumables, medical devices and records and quick response transportation of transplant organs and blood. Unless samples and specimens make it to the lab on time, successful analysis may not be possible. If these are delivered late, or lost completely, patient diagnosis could be delayed and new samples have to be taken. The window between collection and delivery is therefore critical and our barcode scanning technology means specimens cannot be misdelivered and can be tracked in real time. 2,000+ Over 2,000 GDP trained couriers Technology innovation Delivery technology can play a real part in the healthcare sector, improving patient access to medication. Expectations are also changing with patients thinking more like consumers and retail pharmacies becoming more commercialised. It is also changing how patients interact with healthcare services. The introduction of GS1 and its barcode requirements, the five-year forward plan and the CARTER report all highlight the fact that tracking technology needs to be a key element of how drugs are dispensed and administered. PathTrak PathTrak is our GPS track and trace system providing a secure patient specimen collection and delivery management service. It offers full visibility through the highly secure transportation of sensitive items such as tissue samples, biopsies and fluids, which are often highly time and condition sensitive. PathTrak was further enhanced in, to offer internal tracking within a single site, maximising transparency and making it an ideal partner to GS1 technology. Healthcare clients can track patient records and samples, not just from pick-up-point (e.g. a GP surgery) to drop-off at the hospital lab, but also from surgical theatre to ward within the same building. Similarly our PharmaTrak service utilises bar code and GPS technology to securely track and trace patient medications and medical devices. Timeslot delivery Our morning or afternoon and specific 1-hour timeslot delivery windows are becoming increasingly important as consumers drive new models of care from their mobile devices. This service is particularly beneficial for pharmacists who can ensure they serve their local customers flexibly and securely by offering defined time window delivery slots that are convenient to the patient. Outlook Key areas of growth for CitySprint Healthcare remain diagnostics and hospital logistics and pharmacy and clinical homecare. We continue to leverage our exceptional know-how in developing cutting-edge healthcare delivery solutions and deploying our smart technology. We aim to be the partner of choice for customers and patients and will develop innovative new products and services to enable us to develop existing markets whilst continuing to expand into new ones.

25 35.7m 55.5% Revenue Revenue split by subdivision Pharmaceutical 25% 45.5% Share of total revenue Revenue split by subdivision Pathology

26 Lords at Home As a growing local brand Lords at Home (Lords) prides itself on being able to offer customers a bespoke, high quality and fully personalised service. On the dot s specified hour delivery helped the retailer continue to stand out by adding value to their customer experience proposition. On the dot technology has also helped Lords achieve operational efficiencies. Prior to outsourcing delivery, Lords had to use resources from other areas in the business. On the dot was able to offer a cost effective model that allowed the retailer to hand over delivery technology and logistics to a trusted partner, so that they could focus their resource elsewhere. This has led to a 528% increase in delivered sales since Lords started using the service. On the dot has empowered us to offer customers a completely different level of delivery service and in turn improve customer experience. Putting the customer at the heart of every aspect of the shopping journey has paid dividends and our customers absolutely love the service. Shaun Bridgeman Head of e-commerce Lords at Home

27 25 CitySprint Retail Improving customer experience with convenient delivery. CitySprint s Retail business had another excellent year with the further development of its offering of flexible delivery services to pure play, high street and multi-channel retailers from store replenishment to final mile logistics and time specific home deliveries. The retail revolution Omni-channel shopping has given retailers many more ways to sell to consumers, but it has also nurtured the demand for ever-increasing levels of convenience and choice. Retailers are recognising customers increasing demands for flexible delivery and using it as a valuable point of difference. CitySprint are uniquely positioned to capitalise on the significant online growth and the associated changing logistical requirements seen in the retail sector through: The development of On the dot, providing defined 1-hour delivery windows an ideal retailer to consumer offering Our established same day infrastructure is in place to service demand. No other company in the UK is able to offer a same day national service Access to a fleet of over 3,000 DBSchecked couriers allowing us to scale up our service according to demand Full logistical capability to support same day stock movement Specific timeslot delivery On the dot Our innovative On the dot service helps omni-channel retailers give control and convenience back to consumers by offering a choice of 1-hour delivery timeslots. On the dot integrates directly into e-commerce websites to provide home delivery for online purchases or from electronic point of sales in-store. On the dot is also tailored to small and independent retailers. By creating an account online, independent retailers can offer the service immediately in-store or over the phone a delivery feature that might otherwise only be available to larger retailers. On the dot allows a retailer to offer convenient delivery to all of their customers. Whereas most timeslot deliveries are often within time frames selected by the retailer or carrier, On the dot lets the customer decide by selecting a delivery window best suited to them. The service offers a number of benefits to retailers allowing them to protect their reputation and improve customer loyalty by building a unique retail experience around their customers' needs. On the dot helps revolutionise the customer experience by: Increasing online conversion and average basket value Enhancing customer satisfaction and loyalty Delivering a competitive advantage over other retailers On the dot can also be used as a flexible last mile solution for customers who click but don t collect, reducing the amount of stock abandoned in stores and saving retailers the cost of a refunded sale and shipping back to their distribution centre. Outlook Our retail operations have experienced a growth that we expect to continue into next year and beyond. We are pushing forward with our strategy to become a market leader in the sector and look to doubling our revenue in the next five years. We have made significant investment in developing our technology platform with the launch of On the dot, and are determined to bring real change to the industry, providing innovative delivery and logistical services to both retailers and consumers. 19.5m Revenue 13% Share of total revenue 60% The percentage of customers who abandon their baskets because of delivery, whether due to cost, speed or convenience. MetaPack, OC&C Consumer Survey.

28 26 CitySprint Scheduled Logistics and Other Continuing to support our client's first and final mile distribution services. Scheduled Logistics plays a pivotal role in CitySprint s business creating considerable revenue growth and developing new services, which improve margin contribution across key sectors. CitySprint In-night Our specialist In-night service is designed to meet the needs of a mobile workforce, providing just-intime deliveries directly into engineers vehicles or shop locations, ensuring they have the correct product or parts needed before 8am. Collections of unwanted stock or faulty parts are also made at the point of delivery and returned for processing. 99% 99% of the UK reached before 7am and 100% of deliveries completed before 8am. Clients have seen an immediate increase in productivity and operational efficiency as engineers save time and fuel travelling to collect parts, equipment or stock from a central location. In-night is particularly well-aligned to the needs of the engineering and service parts sector but we are also focusing on other sectors such as domestic home appliances, maintenance, food and beverage and automotive where the service is well suited. Partner logistics A number of our clients have fixed infrastructures, which makes our flexible service offering, bespoke first and final mile logistics solutions and ability to deliver direct to the individual particularly valuable. Specialist supply chain companies leverage our network to enable rapid deployment into the field. Parts are stored at CitySprint service centres and delivered by same day couriers within timed delivery windows, enabling recipients to receive goods within two hours of placing an order. Another CitySprint specialism is the collection and delivery of samples for testing in laboratories that are often fragile and temperature controlled. In a two-day process our couriers collect samples (often soil or water) from field engineers or unmanned locations that are then consolidated utilising our network of 41 service centres, for onward delivery to central testing laboratories. Parts and engineering The parts and engineering sector are seeing increasing demand as businesses seek efficiency gains from lower stock levels and higher staff productivity through just-in-time deliveries. Many parts distribution companies use CitySprint as a flexible and white label extension of their own service offering. Same day automotive distribution is a great example of a collaborative approach where strategically placed warehouse operations are combined with just-in-time final mile logistics. CityBags Our CityBags business provides repatriation services for delayed luggage and lost property for over 70 airlines, including nine out of the 13 major airlines based at Heathrow Airport. Our onsite presence and airside clearance has uniquely positioned us to be able to service the sector across various airports throughout the UK. We have seen considerable growth in the last year with major wins for a number of airlines, as well as extending our services into Northern Ireland. CitySprint Document Solutions New to the business in is our specialised digital print, mailing and distribution service. Document Solutions has already made considerable investment in new equipment and technology in an effort to capitalise on growth opportunities, looking to increase revenue by 25% over the next 12 months. Outlook We will continue to support our clients first and final mile delivery distribution services by adopting new leading-edge technology to drive further innovation. We also hope to expand our In-night service into new sectors with the aim of driving efficiency and improving service levels. Stannah Stannah are an independent family-run company with a strong engineering history who design and manufacture lifts, stairlifts and escalators. As leaders in their market, Stannah needed a flexible delivery service to support their field engineers who had to travel long distances to their offices in Andover and Bristol to collect urgent parts, equipment and stock. Working in partnership with CitySprint, Stannah utilised our In-night service to collect items from Andover by 5pm and deliver into our Bristol Service Centre for sorting and labelling, ready to be sent out to locations within a 150 mile radius. CitySprint couriers then deliver directly into engineers' vehicles before 7am, providing them with the essential items needed for the next working day to achieve their clients' SLA agreements. Since Stannah has started using our In-night service they have seen an immediate uplift in productivity, an increase in revenue and improved customer response times. Originally established as a trial from their Bristol office, Stannah are now looking to roll out the service nationally to an additional 12 sites within their.

29 90.8m Revenue 62% Share of total revenue

30 28 ESG strategy Putting sustainability at the forefront of our business. We proactively manage our environmental, social and governance (ESG) strategy, as part of our broader responsibility to our clients and the communities in which we operate. We recognise that our approach can create real value and have a positive ethical impact on our corporate performance, local communities and society as a whole. Reducing our impact on the environment As a business we are committed to minimising the effect of our daily activities on the environment and supporting and promoting best environmental policies and practices wherever possible. Our current targets to reduce our environmental impact include: 5% reduction in paper use across the business 100% roll-out of smart meters to all CitySprint service centres Recycling of 75% of all waste Reducing emissions Improved technology has helped us to enhance the efficiency of our operation, using smarter scheduling to reduce the number of miles and wasted journeys. We recognise, however, that the largest share of our emissions (in excess of 95%) are attributable to our fleet. Diesel engines still represent the main option for delivery of same day courier services at a competitive price but we are continuing to work in partnership with our couriers and clients to find ways to reduce the emissions of our fleet. Key initiatives include the reduction of dead mileage; consolidating journeys travelling in the same direction; offering driver training in fuel efficient techniques; using the smallest vehicle for each delivery; selecting diesel engines that comply with Euro 5 standards or above, whilst continuing to remove older vehicles from our fleet and providing low or zero emission vehicles wherever possible. 20% Our drivers save 15-20% on fuel after completing our one to one energy efficiency training in partnership with the Energy Saving Trust s ecodriving scheme. Expanding our green fleet Pushbikes are a core part of our business with over 90 cycle couriers in London at peak demand. These couriers cover the complete 40 square miles of London's congested central business district from Shepherd's Bush to Canary Wharf and not just the square mile. We continue to explore new types of fleet and have a number of electric vehicles in central London. Although not always a viable option for every business, we are continuously working in partnership with our clients to determine where they make both financial and environmental sense. We have introduced mini vans for smaller deliveries as well as cargo bikes, able to hold a greater capacity than a normal pushbike whilst still being able to easily navigate busy city centres also sees CitySprint exploring zero emission alternatives such as hydrogen vehicles to make vital deliveries within the heavily polluted centre of London without the negative effects on public health. Environmental standards CitySprint is certified to ISO standards, an important environmental management system, which supports the continuous improvement of energy consumption and waste management. In, we recycled over 200 tonnes of waste through service centre recycling collections, to avoid it going to landfill. All of our 41 service centres operate using green and renewable energy and we have taken additional steps to ensure our facilities have improved energy efficiency by refurbishing our sites and ensuring building work is undertaken with high levels of thermal insulation and LED lighting. Change London CitySprint is supporting a new initiative, Let s Make Air Pollution Visible, led by Deliver Change; a non-profit organisation focused on sustainable technology projects. The campaign aims to bring business, government and local communities together to help improve UK air quality. Currently in its initial stage, the initiative sees the organisation make use of a range of sensors placed around the country s major cities, which analyse pollution in the air, helping to inform and drive practical solutions to improve air quality. This forms part of our continued support for the charity who we have partnered with for two years. We sponsor three of its AirSensa monitors, installed on our London Service Centre, providing real time air quality information. We also offer free logistical support to Change London to help them distribute pollution monitors throughout the capital.

31 29 Communities Our support for local communities continues through our charity partnerships. We partner with a number of charities including Crisis, the national charity for single homeless people, to utilise our established network to provide delivery support. We have worked with Crisis since 2010, offering practical, year-round support from providing vehicles for the Crisis team to collect and distribute donations, to helping people move into permanent accommodation. We have also supported their vital work at Christmas through our service centres in London, Edinburgh, Birmingham, Coventry and Leeds. We also actively support and encourage our employees who are involved with charitable causes, sponsoring both individuals and teams in their fundraising activities. As part of our ongoing charity commitments we established a sponsorship fund in, to help provide equipment, kit and training materials for local sports teams that share our corporate values. Corporate governance The Board of CitySprint is committed to high standards of corporate governance operating with an independent chairman, two executive directors and two nonexecutive directors who meet regularly throughout the year. Additional meetings are held with the Executive Team to discuss the strategic and operational development of the business. The Board and Executive Team each met 11 times in. We place considerable value on the involvement of our employees and couriers in the business and use a number of ways to engage with our people on matters that impact them. Employee communication and engagement It is important that we encourage open dialogue with our employees, ensuring there is always formal two-way communication and that our people are engaged in their part of the business and its future direction. Our bi-annual employee opinion survey is one of the principal tools for measuring employee engagement providing insight into employees' views on how we are performing as a business and what is most important to them. Our employee representative body has also helped to improve communication throughout the Company. Meeting on a quarterly basis, the Employee Forum is an opportunity for representatives to make a valuable contribution to CitySprint with suggestions such as an increase in holiday allowance being implemented. Both the employee survey and representative body help us identify areas where we can improve as an employer and encourage participation and consultation in the decisions we make. 95% 95% of respondents to our employee survey either strongly agreed or agreed that they are aware of and understand the aims of CitySprint as a Company. Open communications channels such as face-to-face briefings, quarterly updates on our operational and financial results and our company-wide intranet, CitySprint s Employee Collaboration and Innovation Lab (CECIL) provide a vital source of company information and have further helped to increase employee engagement and communication across all our service centres.

32 30 Board of Directors The Board is responsible for the long-term success of the, its strategy, values and governance. The Board The Board provides leadership of the, either directly or through the Executive Team, on matters such as strategy and performance. The Board sets the s strategic objectives and approves and monitors business plans and budgets submitted by the Executive Team and senior management. The Executive Team Under the direction and authority of the CEO, the Executive Team oversees the day-to-day running of the business, ensuring strategic co-ordination and alignment. It identifies strategic business development opportunities and monitors key projects across the, ensuring successful delivery of the business plan. The Executive Team is also responsible for the oversight and operation of the s principal business functions. Board Non-Executive Chairman, two Executive Directors (CEO & FD) and two Non-Executive Directors CEO Executive Team CEO and six directors responsible for the s key business functions Business functions LastMileLink Technologies IT Finance HR Sales & Marketing Healthcare Operations Logistics Client Services

33 31 David Burtenshaw 64 Chairman Relevant experience Metapack, Chairman ( ); EuroExpress, Chairman ( ); LYNX Express, CEO ( ); Federal Express, Managing Director Home Delivery Division ( ) Key achievements and responsibilities A strong track record in the logistics sector holding senior board positions for over 35 years Instrumental in the successful growth of CitySprint Managed the sale of Lynx to UPS in 2005 Patrick Gallagher 49 Chief Executive Officer Relevant experience CitySprint, Managing Director ( ); Dispatch Management Services Corp, Senior Vice President ( ); Addison Lee, General Manager ( ) Key achievements and responsibilities 30 years' experience in the same day distribution industry in a career that includes managing a nationwide US same day distribution network for a public quoted company (NASDAQ) Named UK EY Entrepreneur of the Year for the London and South region and M&A Awards Dealmaker of the Year winner Led the successful management buyout of CitySprint in 2010 and a subsequent secondary MBO in 2016 valuing the business at 175 million Gerard Keenan 48 Finance Director Relevant experience Telecity Plc (formerly Redbus Interhouse), Financial Controller ( ); Qualified Chartered Accountant, FCA (1993) Key achievements and responsibilities Responsible for the day-to-day company finances and the HR, IT, compliance and acquisitions functions Supported CitySprint s aggressive growth strategy by successfully refinancing the on four separate occasions (2005, 2007, 2011 and ) and assisted in two successful management buyouts in 2010 and 2016 Led the successful acquisition and integration of 24 businesses into CitySprint Awarded Private Equity-Backed FD of the Year Nicol Fraser 48 Non-Executive Director Relevant experience Dunedin LLP, Partner (2001 Present); Bridgepoint Capital, Investment Director ( ) Key achievements and responsibilities Overall responsibility for Dunedin s portfolio of investments Over 19 years of private equity experience Represents Dunedin on the boards of CitySprint; Formaplex, Kee Safety and Weldex Nicholas Hoare 34 Non-Executive Director Relevant experience Dunedin, Partner (2016), Chief Operating Officer (2007 Present); Steeper Holdings, Non-Executive Director (2011 Present); etc. venues, Investment Manager ( ); Accenture, Consultant ( ) Key achievements and responsibilities Responsible for transacting deals across the UK with focus on business services and healthcare Involved in the buyouts of CitySprint; EV Offshore and Red; the refinancing of etc. venues and Steeper Holdings and the exit of etc. venues

34 32 Executive Team Patrick Gallagher 49 Chief Executive Officer See page 31. Gerard Keenan 48 Finance Director See page 31. Paul Gisbourne 43 Operations Director Relevant experience CitySprint, Regional Manager ( ); UK Today Couriers, Regional Manager ( ); TNT Specialist Services, Out of Hours Manager ( ) Key achievements and responsibilities Full commercial, operational and service delivery responsibility across all business lines Instrumental in the successful growth of CitySprint from 60 million to 150 million by strengthening the network with staff across all management levels, increasing fleet size (1,500 to 3,000 couriers) and enhancing the implementation process to absorb new revenues rapidly Created a courier platform streamlining workflow to couriers, optimising the national fleet to reduce empty courier miles, improving courier allocation and above all the customer experience

35 33 Justin Moore 45 Sales & Marketing Director Relevant experience CitySprint, Regional Sales Manager ( ); Amtrak Express, Customer Relationship Manager ( ); DHL Express, Key Account Manager ( ) Key achievements and responsibilities Responsible for all areas of marketing, new business development and brand promotion Driving force behind improved new business revenue contribution to 7 million per year in five years Delivered the new brand identity in 2012 and new company-wide intranet in Responsible for the On the dot branding, sales and marketing campaign in Darren Taylor 45 Logistics Director Relevant experience CitySprint, General Manager Regions ( ); CitySprint, Regional Manager ( ); Red Star Parcels, Depot Manager ( ) Key achievements and responsibilities Driving force behind the logistics revenue growth from 30% to 45% of CitySprint s business revenue (2010 vs. ) Track record of identifying opportunities and leading diversification into new sectors. Driven annualised run-rate growth of >300% (over 28 million) in the pharmacy delivery, parts logistics and retail sectors Spearheaded a new approach to solution design, establishing and implementing several new service types Santosh Sahu 36 CEO LastMileLink Technologies Relevant experience Capgemini UK Plc (Digital Practice), Principal Digital Consultant (2012 ); iforce Ltd, London (Logistics 3pl), Head of Software Development ( ); Getz Bros & Co, London, FMCG distribution Strategy Manager ( ); Pinna Consulting Limited (IT consultancy), Founder ( ) Key achievements and responsibilities Responsible for CitySprint s IT innovation under LastMileLink Technologies Led the design and delivery of On the dot defined window delivery slot platform Previous clients include Asda Logistics Services, John Lewis and Tesco to develop their supply chain strategies Broad global technology experience of working in South Asia, Europe and USA Mike Timlett 52 IT Director Relevant experience Securicor Omega Express, Customer Automation Manager ( ) Key achievements and responsibilities Responsible for development and implementation of all IT platforms and support across the Developed a three-year strategy to introduce leading-edge technologies and software Delivered over 30 new software developments in five years Naomi Ward 39 Client Services Director Relevant experience CitySprint, National Client Services Manager ( ) Key achievements and responsibilities Responsible for the delivery of the s customer experience strategy which touches over 12,500 clients across 41 locations Led a strategic project to source a new company-wide CRM system in 2013 Introduced LiveChat and social media touch points to support a multi-channel contact centre